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Tesla shares plunge amidst hyped $44 billion Twitter buyout by Elon Musk
The reported fall might reflect investors' apprehensions about a shift in attention by the Tesla CEO. However, the next few weeks will be crucial to the future of the company, as the market forces stabilize.
Amidst the hype around a landmark deal, one that will go down in history, where Elon Musk acquired Twitter Inc for $44 billion, shares of Tesla reportedly recorded a plunge on Monday.
The buy-out has critics questioning the future and dynamics of the social media platform populated by millions of global leaders and users as the reins now lie in the hands of the world’s richest person. The apparent weakness in Tesla shares might reflect investors’ apprehensions about a shift in attention by the Tesla CEO. The next few weeks will be crucial to the future of the company, as the market forces stabilize.
Shares of the electric-vehicle company ended 0.7% lower after Twitter said it agreed to be acquired by Musk for $54.20 per share in cash. Bloomberg reported that the shares were among the five biggest weights on the S&P 500 Index, which rose 0.6%.
Despite Tesla’s shares facing headwinds by 7% this year, the EV enterprise has outperformed most mega-cap technology companies, the broader market, and auto behemoths such as General Motors Co. and Ford Motor Co. Twitter’s shares were up more than 6% after being halted by the New York Stock exchange.
The robustness of Tesla’s shares over the course of the last year is reflective of the company’s efficient management of supply-chain shortages and skyrocketing raw material costs. The performance of Telsa in Q1 further highlighted its edge, with Tesla reporting solid profits and saying that it was on track to expand production to more than 1.5 million vehicles this year, despite supply challenges.
Twitter is the latest company to be added to Musk’s portfolio, including Space X, The Boring Co., and Neuralink Corp.